Escrow vs Title Company in Washington

For many buyers and sellers in Washington, the real estate closing process can feel complicated. Two of the most important players are the escrow company and the title company. While their functions sometimes overlap, each plays a distinct role in ensuring a smooth transaction.

This guide explains the difference between escrow and title companies in Washington, what each does, who chooses them, and how they affect your costs and timeline.

What Is a Title Company?

A title company is responsible for verifying that the seller has clear ownership of the property and the legal right to transfer it. Services include:

• Conducting a title search to uncover liens, encumbrances, or disputes.

• Issuing title insurance to protect buyers and lenders.

• Recording the deed and other legal documents with the county.

🔗 Related glossary terms: Title Insurance, Deed, Encumbrance.

What Is an Escrow Company?

An escrow company acts as a neutral third party that holds funds and documents until all conditions of the sale are met. Services include:

• Holding earnest money deposits and down payments.

• Managing the exchange of funds between buyer and seller.

• Coordinating signatures, loan documents, and closing statements.

• Disbursing payments to lenders, sellers, and service providers.

🔗 Related glossary terms: Escrow, Earnest Money, Closing Costs.

Escrow vs Title in Washington – Key Differences

Who Chooses Escrow and Title?

In Washington, the choice of escrow and title company is negotiable. Traditionally:

• The buyer often chooses the escrow company.

• The seller may suggest the title company.

• Local custom and negotiations ultimately determine the selection.

Fees for Escrow and Title Services

Both escrow and title companies charge fees, which vary based on the property price and complexity of the transaction. Sellers and buyers should:

• Request fee estimates early.

• Clarify which party pays specific costs.

• Compare quotes if possible.

How Escrow and Title Work Together

Although separate entities, escrow and title companies coordinate closely to:

• Confirm clear ownership.

• Ensure funds are handled securely.

• Prepare closing documents.

• Record the final deed.

This collaboration ensures that both the legal and financial aspects of the sale are handled correctly.

Tips for Buyers

• Review preliminary title reports carefully.

• Ask for an explanation of escrow fees.

• Stay responsive to requests for signatures and documents.

• Confirm who holds your earnest money.

Tips for Sellers

• Resolve liens or title issues before listing.

• Provide payoff statements promptly.

• Communicate clearly about timelines with escrow.

• Budget for both title and escrow fees in your net sheet.

FSBO Sellers and Escrow/Title

For for-sale-by-owner (FSBO) sellers, escrow and title services are critical partners. Even without an agent, these companies ensure your transaction closes smoothly.

Pairing with a flat fee MLS listing service gives FSBO sellers professional marketing while escrow and title handle the closing process. This combination saves money and ensures compliance.

Key Takeaways

• Title companies focus on ownership verification and insurance.

• Escrow companies focus on holding funds and managing documents.

• Both are essential for a secure closing in Washington.

• Selection of companies is negotiable but guided by custom.

• A flat fee multiple listing service helps FSBO sellers manage costs and maximize proceeds.

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By understanding the roles of escrow and title companies in Washington real estate, buyers and sellers can reduce confusion, plan for costs, and ensure a smooth closing.

Want to sell with full MLS exposure while keeping more of your equity? Try Wayber’s flat fee MLS listing service today.